Sharp “selling its soul” with Samsung deal

Samsung Electronics Co.’s announcement that it would be buying a stake in Sharp Corp. has caused a stir in Japan, with some claiming that the Japanese brand is “selling its soul” by teaming up with its South Korean competitor.

Samsung’s recently announced 10.3 billion yen ($111 million) investment for a 3% stake in Sharp is still too small to revive the struggling Japanese consumer-electronics manufacturer, according to the Financial Times. But it will give Samsung access to Sharp’s low-cost thin-screen technology LCD panels.

According to The Nikkei, Samsung’s orders for LCD panels for 32-inch TVs managed to keep Sharp afloat.

The capital alliance was met with public criticism in Japan, reflecting the underlying frustration over the country’s struggling consumer-electronics industry, which dominated in the 1980s and 1990s, FT reports.

It also comes amid lingering tensions between Japan and South Korea over a territorial dispute.

Sharp forecasts a full-year loss of 450 billion yen. It sought to revive its business by selling a 2.6% stake to US chip maker Qualcomm last year for 10 billion yen. Sharp also announced plans to sell a 9.9% stake to Taiwan’s Hon Hai Precision Industry Co., but the talks failed.

Sharp was once the global market leader in electronics before Samsung took the reign as the world’s top maker of smartphones, TVs and memory chips.